Nearly a decade after the iPhone broke the mould, is the evolution of the smartphone finally come to an end?

Industry experts believe innovation is giving way to phone functions popping up as software or services in devices from cars to fridges and to watches and jewellery.

Even Apple now treats older, smaller 4-inch screens as something new.

And analysts and product designers said fresh breakthroughs are running up against the practical limits of what's possible in current hardware in terms of screen size and battery life.

Industry experts believe innovation is giving way to phone functions popping up as software or services in devices from cars to fridges and to watches and jewellery. Even Apple now treats older, smaller 4-inch screens as something new (Apple's Greg Joswiak is pictured in front of Apple's new iPhone SE handsets)

'Everything in the phone industry now is incremental: slightly faster, slightly bigger, slightly more storage or better resolution,' said Christian Lindholm, inventor of the easy text-messaging keyboards in old Nokia phones that made them the best-selling mobile devices of all time.

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The financial stakes are high as the futures of Apple, Google, and Microsoft, the world's three biggest listed companies at the end of last year, may now turn on who gets the jump on making handsets redundant.

Many firms are experimenting with new ways to help consumers interact with the wider world through touch, sight and sound.

Analysts and product designers have said fresh breakthroughs are running up against the practical limits of what's possible in current hardware in terms of screen size and battery life. The iPhone SE is pictured

Its been almost a decade since Steve Jobs unveiled the first iPhone (pictured). It had a single 'home' button and Multi-Touch display with a resolution of 320 x 480 pixels or 163 PPI. This was 38 times the resolution of the Nokia screen, meaning effectively 38 could be fitted in the new handset

THE FINANCIAL IMPACT FOR FIRMS

Financial analysts at UBS estimate smartphone makers will generate more than $323 billion in revenue this year, a 1.4 percent decline from last year.

Apple alone took in half of that revenue and more than three quarters of all profits, according to research firm Strategy Analytics.

Seeking to reverse declining iPhone sales, Apple announced a range of new products on Monday including including a cheaper 4-inch (10 cm) screen iPhone SE.

Last year Microsoft pulled back from the handset business, writing off $7.6 billion for its fruitless acquisition of Nokia's handset business.

Increasingly, its strategy has become to make money off the back-end of mobile software, through selling cloud-based services, now its fastest growing business.

Google generates virtually all of its revenue from advertising sold alongside its wide variety of Web services, rather than from its Android software, which drives roughly 80 percent of the world's phones.

It is cagey about how much revenue comes from mobile advertising, but analysts estimate this contributed roughly a quarter to a third of its $75 billion revenue reported in 2015.

These include voice-activated personal assistant devices dangling from 'smart jewellery' necklaces with tiny embedded microphones or tiny earpieces that get things done for us based on our verbal commands.

The world's biggest tech companies have made real progress in this arena with Google Now, Apple Siri, Microsoft Cortana and Amazon.com's Alexa now able to read texts or emails for users, answer practical questions, control phone features, handle basic communications or read a map.

'The way the whole thing is evolving, the device itself is becoming just another way to provide access to a user's digital life,' said independent financial analyst Richard Windsor.

He sees smartphone functions splitting into two camps - big-screen devices for rich entertainment and compact wearables for more activities like keeping up with calendar, health or fitness monitoring or paying for goods or services.

For while phones are now the Swiss Army knives of the electronic age, their essential appeal to consumers has shifted from their eye-catching shiny screens and sleek bevelled edges to the apps and services running on the phones, often as Internet-based services hosted in the cloud.

'Mobile networks are moving to connect to all these other devices,' said Bob O'Donnell, a consumer electronics analyst and president of Technalysis Research in Foster City, Calif.

Whatever platform might displace the handheld phone also will need to resolve nagging questions about battery life, which have become more pressing as consumers watch more and more video.

BEST SELLING PHONES IN THE LAST 20 YEARS

1996: Motorola StarTAC, one of the first flip phones sold 60 million

1998: Nokia 5110 with its changeable covers is thought to have sold more than 160 million

1999: One of the first phones without an antenna, the Nokia 3210 sold over 160 million units

2000: Sleeker Nokia 3310 with extra features sold more than 126 million handsets

2003: Cheap and durable Nokia 1100 sold more than 250 million units

2004: Nokia's 2600 offered one of the first set of desktop tools and sold more than 135 million units.

2005: Nokia 110 - popular in developing countries - sold more than 250 million.

2006: Part of the 'Ultrabasic series' the Nokia 1600 sold more than 130 units.

2007: With 360 hours of battery life on standby, the Nokia 1200 was snapped up 150 million times.

2008: Apple iPhone 3G: Over 12 million people bought Apple's second generation iPhone.

2012: With quad core speed and a 4.8 inch screen, Samsung's Galaxy SII and SIII sold 40 million units.

2013: The follow-up handset, the Galaxy S4, sold 40 million units.

2014: The Apple iPhone 6 and 6 Plus sold 74.5 million handsets - 34,000 an hour at peak.

2015: Tigermobiles predicts the iPhone 6S will be the best-selling handset of the year, with the Samsung Galaxy S6 close behind.

The next big device also needs more flexible screens capable of working in different lighting conditions.

That's a decades-old dream of gadget enthusiasts that has eluded recognised market leaders Samsung and LG of Korea, which have struggled for years to mass-produce flexible screens at anything close to mass-market prices.

Richard Windsor said flexible displays that could be unfolded or unrolled to up to 10 or 14 inches would set phones free from being defined by screen size. 'What is a tablet computer?' Windsor asks. 'Why would you bother having a tablet? That market would just evaporate overnight,' he said.